What is Business Succession Planning?
Business Succession planning is a strategy for passing on leadership roles—often the ownership of a company—to an employee or group of employees. This ensures that businesses continue to run smoothly after a company’s most important people move on to new opportunities, retire, or pass away. Succession planning can also provide liquidity enabling the transfer of ownership.
Why Business Succession Planning?
The purpose of Business Succession Planning is to make sure a company always has the right leaders in place should a change happen quickly. By failing to create an orderly plan for succession, your company may not get a second chance if it doesn’t adapt immediately after a key player leaves the company or passes away.
What are the 5 common Business Succession Plans?
- Co-owner: Selling your shares or ownership interests to a co-owner.
- Heir: Passing ownership interests to a family member.
- Key employee: Selling your business to a key employee.
- Outside party: Selling your business to an entrepreneur outside your organization.
- Company: For a business with multiple owners, you can sell your ownership interests back to the company, then distribute them to the remaining owners.
So, what’s the Abundant Life Planner’s approach to Business Succession Planning?
Using our 100 unique questions on the vulnerabilities on the company, we find out what’s important to you as the business owner and what keeps you awake at night. What’s important for you, your family and your business may not be the same for another person nor another business.
We also find out what are your initial plans for Business Succession Planning and also if you have planned for a successor for your business. With that, we step in as Financial Architects to evaluate the initial plans and provide you with the most suitable recommendation.
